AT&T is petitioning the Federal Communications Commission to impose network buildout conditions on Dish’s satellite spectrum –- requirements that would be passed onto AT&T if it acquired the satellite TV provider. Meanwhile, Dish insists it plans to use that spectrum to build a commercial LTE network to challenge the reigning nationwide mobile operators, including AT&T. These are hardly the actions of two companies about to tie the knot.

What we’re witnessing here is some very cynical pre-nuptial gamesmanship. According to TMF Associates satellite communications analyst Tim Farrar, Dish is playing AT&T off its competitors by threatening to partner with MetroPCS to build a nationwide LTE network over its satellite broadband and 700 MHz spectrum. To muck up Dish’s plans, AT&T is insisting to the FCC that the satellite TV provider face the same strict rollout requirements the commission imposed on fellow satellite spectrum holder LightSquared: An LTE rollout covering 100 million people in 33 months and 260 million in less than 6 years.

As Farrar wrote in his blog:

This submission is a blatant attempt by AT&T to put a thumb on the scales, as the FCC weighs up the appropriate balance between buildout mandates and clawback of any windfall. The reason for AT&T’s action at this very late stage in the process appears to be that DISH is trying to play off AT&T’s prospective bid against a potential venture with MetroPCS. MetroPCS would certainly be unwilling to commit to a 260M POP buildout, so if the FCC conceded AT&T’s demands, they would be the only game in town and DISH would lose its leverage in price negotiations. We’ll find out soon enough if AT&T’s gambit succeeds, but few would bet against [Dish chairman] Charlie Ergen’s poker playing skills after the events of the last year.

AT&T may seem like the bad guy here, but Dish’s motives are just as suspect. In an FCC filling Thursday, Dish maintained it plans become a competing mobile operator, launching an LTE network that would compete with the big 4:

The overly aggressive and unrealistic schedule AT&T advocates would likely set DISH up for failure or force DISH into unfavorable business arrangements with large Commercial Mobile Radio Service (“CMRS”) carriers.  It would erect artificial barriers to DISH’s plan to construct a new mobile broadband network on its own or consideration of partnerships with smaller companies, and could threaten DISH’s ability to roll out a retail service.  In short, an impracticably tight schedule would be a triple loss for consumers, the Commission, and DISH.

But as my colleague Stacey Higginbotham wrote when Dish first applied for permission to build LTE, Dish’s proposal sounds more like a financial gamble to cash in on the skyrocketing value of mobile broadband spectrum, rather than a legitimate bid to become a wireless competitor. One big clue is Dish’s insistence on deploying an LTE-Advanced network in order to “enter the market for the first time with the most advanced technology.” Of course, LTE-Advanced was just finalized as a standard so Dish claims it will have to wait several years before commercial equipment is available.

That’s absolute malarkey. LTE-Advanced is an iteration of LTE technology, not a completely new network. Claiming that you must wait until LTE-Advanced equipment is available before building a network is kind of like insisting you can’t move into a house before the shag carpeting is installed. There’s nothing stopping Dish from building an LTE network this year and evolving it into an LTE-Advanced network in 2013 or 2014.

Supposedly we face a spectrum crisis, but no one is acting like it. Instead of using public airwaves to deploy real networks, operators seem to be playing high-stakes poker with their licenses. AT&T’s motives may be self-serving, but maybe in this case it’s right. If it forces strict rollout guidelines on Dish’s spectrum and then buys those licenses, we may actually get a new mobile broadband network – rather than a bunch of operators whining about how they don’t have the spectrum to build them.

Poker Image courtesy of Flickr user Ross Elliott
Tower Image courtesy of Flickr user Nikhil Verma

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• 2012: Data, spectrum and the race to LTE
• Mobile Q4: The scramble for spectrum continues
• Confused about the wireless markets? Here’s a breakdown

alt=''
border='0'
/>

GigaOM

AT&T will also offer an additional 5 GB high-volume smartphone plan for a month, which includes tethering and mobile hotspot use. For tablets AT&T will offer the same and tiers as it does for smartphones, though without tethering, and it will keep its 250 MB plan in place. The same per gigabyte overage fee will remain in effect for all of the higher tier plans, though its rather discriminatory policy toward data excess on its lowest tier plans will persist. Customers with the 300 GB will have to pay another to get another mere 30 GB. All existing unlimited customers on the old capped and unlimited plans are grandfathered in (though throttling will remain in effect for unlimited), but existing customers can switch to the new pricing tiers if they wish.

There’s a way to look at this as a positive. AT&T is actually lower the per-MB cost of data as mobile Internet and app use skyrockets. That’s a trend that needed – and still needs – to occur if operators are to keep ahead of the increasing bandwidth demands of smartphones and tablets. AT&T still isn’t as cheap as Sprint, which is still clinging to unlimited, and T-Mobile, which offers gobs of data for dirt cheap prices, but it is definitely undercutting its primary competitor, Verizon Wireless which offers 1 GB less for the same price on the most popular plan. Unless operators want mobile broadband innovation to go stagnant pricing-per-megabyte will have to fall further.

But make no mistake about it: AT&T may be smoothing over the edges but this is most definitely a price hike. Some of AT&T’s current customers may switch over the plans by choice, particularly customers that often go just over their 200 MB or 2 GB caps each month. But AT&T will be collecting more month from all new customers. That’s going add up to a hefty pile in AT&T’s coffers, and most customers won’t be happy about it.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• 2012: Data, spectrum and the race to LTE
• Mobile Q4: The scramble for spectrum continues
• Forecast: global mobile subscribers, 2010–2015

alt=''
border='0'
/>

GigaOM

Wired Top Stories